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An Analysis of Emission Factors for Purchased Electricity in China

This working paper identifies common errors when accounting for greenhouse gas emissions from purchased electricity in China. It provides solutions and recommendations for policy makers and corporate users.

Better to Pursue Climate Action Now

While things may look bad today, unchecked global warming will exponentially increase the human and economic toll of responding to a permanently altered planet. A recent report from the World Bank outlines the devastating effects of a global temperature rise of 4 degrees Celsius (7.2 degrees Fahrenheit) above pre-Industrial levels: flooding of coastal cities, risks to food production, unprecedented heat waves, increased frequency of killer storms, and more. This is not the future that we want to leave our children and grandchildren. Nor can we simply adapt to this future – even if we wanted to.

The IEA makes it clear that acting now will be less costly than waiting until later on. We should be moving toward a low-carbon future, investing in low-carbon energy systems, and preparing our infrastructure for oncoming climate impacts. According to the IEA, delaying action would increase the costs by having to retrofit energy sources and risking their becoming obsolete. The IEA lays out four sensible measures that countries can undertake to curb growth in GHG emissions by 2020—and which come at no net economic cost.

Another season of extreme weather events is upon us. A severe storm, with winds up to 70 miles per hour, whipped its way from Illinois to Washington, D.C. Meanwhile, Colorado is experiencing one of its worst wildfires in history—the Black Forest Fire has burned 15,700 acres, displaced more than 38,000 people, and impacted 13,000 homes. These events are reminders of what the world will look like as our climate system moves into increasingly dangerous and unfamiliar territory.

This week also brought a trifecta of events with significant implications for climate change.

The latest report from the International Energy Agency revealed that energy-related carbon dioxide emissions hit an all-time high in 2012. These emissions are driving up global temperatures and increasing climate instability. The IEA concludes that it’s not too late to change course, but the window for action is closing rapidly.

Our current response to climate change is grossly inadequate. Fortunately, there are some signs that the winds are starting to change.

Much like recent extreme weather events in Europe and the United States, this month’s intersessional in Bonn, Germany could be described as volatile. But despite some “stormy” discussions, rays of light could still be seen in some areas.

The low point that seems to be generating the most attention is Russia preventing a key UNFCCC working body from making any progress. Russia, along with Ukraine and Belarus, blocked the Subsidiary Body on Implementation (SBI), which works on both substantive and administrative implementation issues, from moving forward on its agenda. Russia appeared to still be upset about the process during a last-minute decision at COP 18 in Doha, when the rules for the next commitment period of the Kyoto Protocol were quickly gaveled through over their objection. Refusing to let the body take up its work unless it included an agenda item on procedural issues for the climate talks as a whole, Russia rejected numerous attempts at compromise.

The blockage in the SBI discussions created noticeable ripples of nervousness throughout the negotiating hall. But in spite of the intermittent gloominess, there were also clear rays of light. What emerged most palpably was an insistence by nearly all the countries here that these kinds of tangles must be avoided, and that they are committed to moving forward on the key issues facing the UNFCCC negotiations and, not incidentally, the world.

When President Obama and China’s President Xi Jinping meet in California this week, they will be seeking to build trust and chart a course for improved relations. While tensions abound over various issues, clean energy and climate is one area where cooperation can work.

Last month, the United States and China released a statement declaring that joint action on climate change can “set the kind of powerful example that can inspire the world.” These two countries have the opportunity to tackle this global challenge, helping keep the world within 2 degrees Celsius of temperature rise, and embrace clean energy on the path to a low-carbon future.

Given the stakes, business leaders should be paying attention.

Clean energy is one of the most important growth sectors in the global economy. It has been projected that $2.3 trillion will be invested in clean energy by 2020, reaching $269 billion last year. China was the number world’s top clean energy investor in 2012, with a record $68 billion. China’s investments are not only within its borders. China’s total overseas investment in 2011 extended to over 130 countries and topped $60 billion.

It’s well-known that China ranks first in the world in attracting clean energy investment, receiving US$ 65.1 billion in 2012. But new analysis from WRI shows another side to this story: China is increasingly becoming a global force in international clean energy investment, too. In fact, the country has provided nearly $40 billion dollars to other countries’ solar and wind industries over the past decade.

China’s Overseas Wind and Solar Investments, By the Numbers

According to our research, Chinese companies have made at least 124 investments in solar and wind industries in 33 countries over the past decade (2002 – 2011), more than half of which were made in 2010 and 2011 (see Figure 1). Despite some gaps in the data that prevent us from generalizing about all of China’s wind and solar investments, we learned that:

Of the 54 investments for which financial data were available, the cumulative amount invested came to nearly US$40 billion.

The majority of investments were in electricity generation. Several investments were made in manufacturing facilities and to establish sales and marketing offices.

Most of the investments were in developed countries. A huge amount went to the United States, as well as Germany, Italy, and Australia. A handful of developing countries—including South Africa, Pakistan, and Ethiopia—also attracted multiple investments.

As evidence of climate change mounts, President Obama has made it clear that tackling this issue will be a priority in his second term. Yet, as weeks go by, the administration has been slow to clarify its strategy. With each passing day, it becomes harder and more expensive to rein in greenhouse gas emissions.

Meanwhile, other global powers are moving forward--and many of them carry valuable lessons which American policymakers can look to. The most successful countries are showing national leadership, strong and consistent policies, and commitment to clean energy.

Where, then, are signs of progress on clean energy?

Germany’s Energiewende: Leading the Way

High on the list is Germany, whose ambitious energy transformation strategy--or “Energiewende”--aims to reduce greenhouse gases by 80 to 95 percent by 2050, compared to 1990 levels. This will be achieved by enhancing energy efficiency, reducing primary energy consumption by 50 percent, and ramping up renewable energy to at least 80 percent of electricity consumption in the same time-frame.

Delegates at the April UNFCCC intersessional in Bonn, Germany made some encouraging progress. As negotiators gather again this week, it’s important that they build on this progress and take action on two key topics: raising ambition, and establishing core elements of the 2015 international climate action agreement.

Indeed, there’s an even greater sense of urgency since delegates met for the April intersessional. The world crossed a perilous and alarming threshold, with atmospheric carbon dioxide levels exceeding 400 ppm, a level that has not been experienced in at least 800,000 years and possibly not for millions of years. Plus, this may be the last intersessional before COP 19 in Warsaw in November. Negotiators must move forward on raising ambition and establishing the 2015 Agreement if COP 19 is to have a successful outcome.

Raising Ambition Now

The need for countries to make more ambitious emissions-reduction commitments remains self-evident—even more so, now that the world has exceeded 400 ppm of atmospheric carbon dioxide. In Bonn, negotiators are set to focus on the transformation of the energy system.

This post was written by Ricardo Lagos, former president of Chile and a member of the high-level advisory panel for the Climate Justice Dialogue. The Climate Justice Dialogue project is a joint initiative between WRI and the Mary Robinson Foundation-Climate Justice. This piece originally appeared on Reuters Alertnet.

It’s become abundantly clear that in order for the world to reach an international climate agreement by 2015, the usual approach isn’t going to work. World leaders need to find common ground and work toward solutions. They need to engage their citizens and infuse new passion into the issue. Climate change is not just an environmental issue – it is one of the great moral tests of our times.

In Chile, we know all too well the impacts of climate change, marked in particular by more frequent droughts and increasing water scarcity. This affects people and our economy across sectors, from agriculture and manufacturing to mining and energy. Sadly, the people most affected by climate change are the poorest and most vulnerable members of society.

In the face of this challenge, we need a new narrative that engages people and presents the issue as a social and economic story rather than as just an environmental one. We need to create a world in which people prosper but without increasing pollution. This is not a distant dream, but a real possibility.

Scientific understanding of the chemicals that contribute to climate change is constantly improving. So, too, is the Greenhouse Gas Protocol (GHGP), as we work to keep abreast of such advances and ensure that they are reflected in our tools and standards.

One recent example concerns the greenhouse gas (GHG) nitrogen trifluoride (NF3), a chemical that is released in some high-tech industries, including in the manufacture of many electronics. The GHG Protocol now requires NF3 to be included in GHG inventories under the Corporate Standard, Value Chain (Scope 3) Standard, and Product Standard. A new GHGP Amendment updates the existing requirements.

How does this update affect my organization?

NF3 is used in a relatively small number of industrial processes. It is primarily produced in the manufacture of semiconductors and LCD (Liquid Crystal Display) panels, and certain types of solar panels and chemical lasers. To the extent that these processes occur in your company’s direct operations or value chain, they may need to be reflected in future inventories to ensure conformance with GHG Protocol standards.